Overtime: get it paid out, or bank it?
 

hey guys,

im torn right now, and i know there are probably people on this site who can help me out

i just started my new job and i get paid 30/hr. working 7 days a week, 10-13 hour shifts.

so im getting a shit load of overtime + doubletime.

my question is, would it be better for me to take a full paycheque...

or

should i bank some of my overtime hours to reduce the amount the taxman takes from me?

and what is the sweet spot that will allow me to have the best takehome earnings to tax ratio.

10-13 hours/day 7 days a week? Wow, welcome to the world of no social life.

wut kinda job r u working?

what the hell do you do??

if i were you i'd take all the money right away and dont bank anything
.. money not in your pocket = not your money

I'm in relatively the same situations every year as you.

Year 1 I took the $$$ as I needed it at the time, but tax man hit me quite hard.
Year 2 I took the $$$ again, but tax man again wasn't very nice.
Year 3 I took half time off half $$, and realized that with the amount of tax taken off it wasn't worth it.

Now for the past 2 years i just take time off. I don't work 7 days like you, just the standard 5 days but 12-14 hour days sometimes. These days I'd rather just enjoy the days off and still get paid. It also gives me time to work on my contract jobs outside of my fulltime work, so it's essentially getting paid double lol.

I think it really depends what you need more right now, whether it's the money or the time off. Working 7 days a week, if I were in your shoes I'd take the time off and sleep in, but that's just my opinion. Hope that helps.

Bank that shit. Why pay more tax when u dont have to. I know alot of people that do that. U gotta figure out at wat point where u get taxed more.

For instance, my friend makes about 140hrs@$25 a paycheque. He banks 40hrs and gets paid for 100hrs cause he told me from that Extra 40hrs =$1000 tax man takes $400 of that from him so it obviously isnt worth getting paid those extra hours. And he just saves them for a rainy day.

I'd take the money.

do you want more money or time off? that is the only question you need to ask yourself. the tax reason is dumb. sure you'll pay more tax by taking the money, but you'll also have more money.

what kind of job do you have? Is your company hiring? I can use some extra cash!

With the hours he is working though what is the point in taking that money?
But at the same time.. with the hours he is working will they let him take extended time off?

My work lets me bank my OT for vacation time, so I got like 1-2 months of PAID vacation down the road. hahah

This would be a special case but if you're working from January and starting school in sept, definitely take the lump $$$, assuming you'll be barely doing a few hours of work during school.

marginal cost of taking more OT money.
sometimes the difference of taking OT money is only 10-20% more than your normal hourly wage. Then you ask yourself, why are you sharing with the government when you can get days off and do a side job or just simply relax.

it may seem like your are getting mnore heavily taxed up front, but taxes at the end of the year are still based on a percentage of your total income

just means you'll either pay less at the end of the year or you'll get more back then you would have normally

i guess you could say that paying it now gives the government your money until they pay it back but that's up to you

i'd say bank it, not necessarily all of it, and then when you take a couple weeks off they will draw from the banked hours

just make sure you track all your hours very very well

if you can bank the hours on a double/triple basis as the way you are supposed to be paid, bank the time.

if not, get the money and start a RRSP and TFSA.

I never understand people when they say "I'm not working more to pay more taxes"

We have a progressive tax system, that only goes up 3-5% each bracket, so its not like you're paying that much more tax by making more.

Your math is very off if you think its only 10-20%, or your work has a bad accountant.

Even if you work even OT to jump 2-3 tax brackets, you're only losing 6-15% more in taxes by working, yet gaining all that income.

Smartest answer :thumbsup:

The ONLY alternative is if you feel like you make enough and value time off more than making money. I make close to 6 figures, and would rather not work OT to make more money I don't need, I'd rather have the time off.

IMO it's a hard decision cause ot plus double time you're sometimes getting paid 45-60/hr

if they were to give you 1.5hours or 2 hours time off then take it.

if not do what wouwou stated and put it in rrsps.




for me though i'm a wimp and can't do too many hours a week or i get sick.
for 2 weeks i had to do 150 hours and i just couldn't take it lol. it was quite physical though.

I wouldnn't worry about it unless you're making over $75K a year.

You can do both in your situation - bank the time, book a vacation, cash it out, bring a lady friend. Bang bang bang. We're all happy and we can stop asking such questions.

I am pretty sure with that amount of OT and a base rate of 30, he is making over 75K.

is this overtime opportunity going to last forever?

if not, then work as much as you can, put money in the bank!

yes, you will get taxed more, BUT things will adjust itself when you file your taxes

and there are many ways to reduce your taxes (ie max out RRSP, TFSA etc)


i know for a fact that there are $30/hr employees out there that rake in over $200k /year because of these "opportunities" from double / triple time pay

Like others have said before me, max out your RRSP contributions and open a TFSA.

waht do u do

His profile says:

Occupation
Fire fighter

If OP is a firefighter, for God's sake take time off

working 7 days a week on 10 hrs shift will literally kill you